GENERAL COMMENTS:
As traders begin to dive into Tuesday's WASDE report and trade the findings, the cattle complex remains in a strong position given that supplies are tight and demand is high. However, the opposite can be said for the pork complex. No cash cattle trade has developed at this time, but bids could begin to surface Wednesday. May corn is down 3 3/4 cents per bushel and May soybean meal is up $5.80. The Dow Jones Industrial Average is up 151.16 points.
LIVE CATTLE:
The live cattle complex continues to move higher as the market flourishes on the strong fundamental footing on which it stands. Asking prices in the South are noted at $174 to $175 but are still unestablished in the North. Cattle are expected to trade higher again this week, but the big question remains: How much higher? Even if prices just remain steady, traders will likely find feedlots' ability to hold the market steady a positive gesture and continue to trade the market steady to somewhat higher.
Tuesday's WASDE report treated the beef and cattle markets mostly favorably. Beef production for 2023 was raised by 110 million pounds, with the second and third quarters of 2023 both seeing increases in beef production while the first and fourth quarters were decreased. The first quarter of 2023 saw a slight price decrease from last month's report, down $0.10 to average $160.90, but the rest of the quarters for the year saw price increases. The second quarter of 2023 is expected to average $169.00 which is $6.00 higher from last month, the third quarter is expected to average $162.00 which is $3.00 higher from last month, and the fourth quarter is expected to average $167.00 which is $3.00 higher than last month. 2023 beef imports were raised by 75 million pounds, but exports for the year also grew by 45 million pounds as demand from Asia countries remains incredibly strong.
Boxed beef prices are higher: choice up $2.06 ($294.97) and select up $4.09 ($282.49) with a movement of 54 loads (23.54 loads of choice, 11.13 loads of select, 8.29 loads of trim and 11.18 loads of ground beef).
FEEDER CATTLE:
The feeder cattle complex is back to trading higher as the market finds relief in the fact the corn complex isn't pushing for higher prices again Tuesday. As the market cautiously nears the noon hour, most of the nearby contracts are scoring new contract highs. April feeders are up $0.10 at $201.05, May feeders are up $0.97 at $206.60 and August feeders are up $0.37 at $223.37. The feeder cattle contracts are banking on the fact that the cash cattle market is expected to trade higher again this week; when it does happen feeders could gain even more momentum.
LEAN HOGS:
The lean hog complex was skeptical of how Tuesday's WASDE report was going to treat its market and after examining the report, traders were right in being cautious. As traders take the time to glance over the report and its grim nature, the lean hog complex continues to trade lower into Tuesday's noon hour. April lean hogs are down $0.35 at $73.02 June lean hogs are down $1.52 at $87.62 and July lean hogs are down $1.70 at $90.45.
Mostly Tuesday's WASDE report wasn't the news in which the pork and hog markets wanted to see. Pork production for 2023 was decreased by 50 million pounds as the latest Hogs and Pigs report highlighted that the December-February pig crop and producer farrowing intentions for March-May were lower than originally expected. The quarterly price projections for barrow and gilt prices were a bitter pill to swallow in Tuesday's report as all four quarters saw price reductions from a month ago as the USDA accounted for the light/modest demand in which pork cuts have been receiving. The first quarter was reduced by $1.17 to average $54.83, the second quarter fell $10 from last month to average $60.00, the third quarter fell by $6.00 to average $67.00 and the fourth quarter fell by $2.00 to average $62.00. 2023 pork imports grew by 60 million pounds from last month, but pork exports also grew by 30 million pounds.
The projected CME Lean Hog Index for 4/10/2023 is down $0.12 at $72.52, and the actual index for 4/7/2023 is down $0.24 at $72.64. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.78 with a weighted average of $70.14, ranging from $63.00 to $73.00 on 3,369 head and a five-day rolling average of $70.71. Pork cutouts total 172.01 loads with 157.89 loads of pork cuts and 14.12 loads of trim. Pork cutout values: up $1.15, $78.21.
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